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Abstract

This chapter summarizes the theoretical and empirical literature on the ethics of tax evasion and then proceeds to examine the opinions of 1,483 Brazilians on the issue using the data from the most recent World Values Survey. The study finds that although Brazilians are strongly opposed to tax evasion in general their opposition is less than absolute in many cases. An examination of some demographic variables highlights some of these cases.

Literature Review

Adams (1982, 1993) published two historical studies on tax evasion covering a period of more than 2,000 years. Cebula and Saadatmand (2005) and others (e.g., Gottfredson & Hirschi, 1990; Groenland & van Veldhoven, 1983; Jackson & Milliron, 1986; Lewis et al., 2009; McGee, 2004, 2012a; Schols & Lubell, 1998; Song & Yarbrough, 1978; Torgler, 2007; Wallschutzky, 1984) examined the reasons for tax evasion. Allingham and Sandmo (1972) and Yitzhaki (1974) developed an economic deterrence model. The common thread running through these studies is that people evade taxes because they can or because they believe the government is not entitled to the money.

Studies of Armenia (McGee, 1999; McGee & Maranjyan, 2006, 2008) found that people evaded taxes because the mechanism for collecting taxes was inadequate and because people did not believe the government was worthy of receiving a portion of their hard-earned income. This view is common in former Soviet republics and in the former communist bloc countries of Central and Eastern Europe (McGee, 2012a). Studies of Armenia (McGee, 1999; McGee & Maranjyan, 2006, 2008), Bulgaria (Smatrakalev, 2012), Bosnia & Herzegovina (McGee, Basic & Tyler, 2008, 2009), Estonia (McGee, Alver & Alver, 2008, 2012), Poland (McGee & Bernal, 2006), Romania (McGee, 2006b; McGee, Basic & Tyler, 2008), Russia (Vaguine, 1998), Slovakia (McGee & Tusan, 2008) and Ukraine (Nasadyuk & McGee, 2007, 2008) support this position, and it is likely to be the position held in other countries as well. People are less likely to evade taxes if the potential punishment is severe, or if the probability of getting caught is high (Cebula, 2001; Kaplan & Reckers, 1985; Kirchler & Maciejovsky, 2001; Torgler, 2012), although, in the past, some people have evaded taxes even if the penalty is death (Adams, 1982, 1993).